Covid 19 redraws the line between accountants and financial advisers

The Covid pandemic has moved the advisory landscape for accountants; the traditional lines between accountants and financial advisers have been redrawn-abruptly.

Regulatory decisions on things like pensions and ISAs were largely about the deployment of “surplus cash” for a tax benefit. The current environment is anchored around cash shortages for many businesses and their owners, where business and personal cash flows are tethered.

In these extraordinary times accountants, more than ever, need to really understand their clients’ personal finances to advise the business holistically. Core “salary and dividend” planning will no longer cut the mustard. Many clients now need short term cash flow advice for themselves, not just the business and are not interested in taking long term financial planning advice. Especially, if the long-term plan is now in tatters.

The IFA is simply not set up to address questions on furloughing, deferring tax payable, grants available etc. In fact, it is highly likely that many clients ask their accountant about Bounce Back Loans and mortgage holidays in the same conversation, as they assume their accountant is the “go to” person on financial matters.

The role of the accountant as the trusted adviser is indisputable. If your client is struggling with their business and paying the bills; it is highly likely that they will struggle personally. It may not be this month or next, but you need your client to be in good shape personally for your corporate client to survive.

Just asking the question is the first step and will help in constructing a business plan.